Adding value to insurance products: the AXA Irish experience

DOIhttps://doi.org/10.1108/JPBM-09-2012-0183
Date19 July 2013
Published date19 July 2013
Pages293-299
AuthorRichard Brophy
Subject MatterMarketing,Product management,Brand management/equity
Adding value to insurance products:
the AXA Irish experience
Richard Brophy
Dublin, Ireland
Abstract
Purpose – While competition within car and home insurance increases through more players and also unfamiliar entrants to the market
(supermarkets), the purpose of this paper is to report on a study of one large insurer in Ireland which attempts to differentiate itself from its peers.
Design/methodology/approach – The paper does this through a literature review of the insurance market and customer relationship management,
and a detailed study of the company loyalty programme and its application to its customers.
Findings – The loyalty programme employed suits the particular sector in terms of purchase intention and also gives the customer of the insurance
brand a sense of belonging and relevance where they can avail themselves of savings on related products.
Research limitations/implications Information sourced is based on published data from the company and other peer reviewed journals. This is a
study on a simple loyalty programme that can be applied to low frequency purchases.
Practical implications This simplified loyalty programme gives the brand high recognition values in terms of how the brand is made relevant to the
customer through discounted related products.
Originality/value – As loyalty programmes are not a usual feature of financial services, this paper highlights a unique programme in operation that is
being replicated elsewhere.
Keywords Insurance, Branding, Customer relationship management, Loyalty, Retention, Intermediary, Differentiation
Paper type General review
An executive summary for managers and executive
readers can be found at the end of this article.
1. Introduction
Like any service brand, insurance companies are adopting
techniques that have traditionally been employed for fast
moving consumer goods to differentiate themselves in a
homogeneous market (McDonald et al., 2001). Simplicity of
insurance products (Devlin, 2001) and technology improving
the quality of the sales process (de Chernatony and Segal-
Horn, 2003; Yang et al., 2004) are patterns that have
revolutionised the industry.
Improvements in technology and communications are also
changing distribution channels, allowing underwriters to
bypass traditional intermediaries like insurance brokers
(Debling, 1998). Alongside this, new entrants, like strong
brands from different industries, are entering unfamiliar
markets, like insurance. For example, supermarkets are
offering financial services (Hatch and Schultz, 2003). New
technologies and distribution channels are creating an
environment in which branding becomes more important
while, at the same time, consumers are becoming increasingly
sophisticated about the relationship between brand promise
and performance (Schreuer, 2000). Hellier et al. (2003) found
that customer loyalty may not be an important intervening
factor between customer satisfaction and brand preference.
The implication is that previously loyal customers are not
necessarily the same as currently satisfied customers or
committed future customers. Unlike other markets, the Irish
insurance industry is dominated by foreign players, where
previously local underwriters had a prominent market
position alongside foreign underwriters (Irish Times, 1997).
These various circumstances mean that practitioners in the
Irish financial service market have had to re-evaluate their
marketing strategies and reassess their approach to
relationship marketing (O’Loughlin et al., 2004).
Thus, insurance companies are facing greater challenges in
differentiating their product from others in the marketplace.
The question of which elements of a particular offering are
crucial to adding value (from the perspective of the
consumers), becomes a key consideration as companies
attempt to formulate competitive marketing strategies
(Devlin, 2001). Customer relationship management (CRM)
or loyalty programs are a very popular option for many
companies who have used this process to give financial and
relationship rewards to customers. Such strategies are
employed in various sectors, both service-based and
product-based (Uncles et al., 2003).
This study looks at one insurer in Ireland who has
employed a unique way of promoting their corporate brand
through its customer base by way of a uniquely crafted loyalty
program. Through a study of the current literature and an
examination of the techniques used by AXA, the development
of the use of personal lines (e.g. Car and Home Insurance) in
the insurance market will be illustrated. This market has
recently seen significant distribution changes as the
technology used has been transformed.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
22/4 (2013) 293–299
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-09-2012-0183]
293

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